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If the participant vests on a separation from service for any reason, then the benefit is already vested. While a noncompete can prevent vesting, that happens only if the person has to avoid competing for some defined period of time. If the person can get out of the noncompete by separating from service, it would be just like any other situation in which someone gets the benefit regardless of when they terminate.

So what you're really saying, I think, is that they are vested, unless the prohibition on working currently (i.e., while employed for the first employer) for a second competing employer is enough to prevent vesting, which is a determination based on facts and circumstances, but seems doubtful. Under 457(f) proposed regs, if the benefit is payable within the short-term deferral period, actually or constructively, it becomes subject to IRC 409A. So if it takes longer than 2-1/2 months after the end of the year in which vested (see above as to substantial questions regarding when vested), you might want to include on W-2 so that "constructively" received. Frankly, I found the proposed regs somewhat confusing on the point of "constructive payment."

You can start with an opening account balance for a past service benefit, but past service is limited to a safe harbor of 5 years, otherwise must be nondiscriminatory. However, you need to align the DCP and test balances accumulating from the same date. Note that if you use prior service to "dilute" current high HCE credits, the impact of that dilution decreases dramatically each subsequent year, so it's not the best longer term strategy to pass testing. That said, it might be a quick fix for year one and possibly year two testing, if you're using an OAB to bump HCE(s) up or waiting on young new NHCEs to become eligible and help pass annual accrual testing.

If the participant died on or after his required beginning date, and the spouse beneficiary does not rollover the account to one she owns, RMDs start in the year following the participant's death and are based on the longer of their own life expectancy or the decedent's life expectancy, using the Single Life Table. Also, if not already taken by the participant, the spouse must take the RMD for the year of death, based on the participant's life expectancy using the Uniform Life Table unless the spouse is more than 10 years younger than the participant, in which the Joint and Last Survivor table would be used instead.